First Berlin – Knaus Tabbert AG Research Update (13/01/2022)

First Berlin Equity Research on 13/01/2022 initiated coverage on Knaus Tabbert AG (ISIN: DE000A2YN504/ Bloomberg: KTA GR). Analyst Kimberly Purvis placed a BUY rating on the stock, with a EUR 95.00 price target.

Abstract
Knaus Tabbert (KTA) is a leading company in the leisure vehicle (LV) industry. With 5 brands, the company is one of the most well-known leisure vehicle manufacturers in Europe. For the last 4 years, KTA has gained market share in both caravans and motorhomes. European LV unit sales began accelerating in 2015, showing compounded annual growth of 12.1% from 2014-2020. Since 2016, unit sales in the German market have doubled. Supply chain issues in 2021 should resolve in 2022, allowing a return to double-digit growth in 2023. With a backlog of €1.4bn, KTA's manufacturing capacity is already completely reserved for 2022 and well into 2023. By 2025, the company plans to double its manufacturing capacity to 50,000 vehicles. With a new brand introduction in 2022, along with the industry's first electric hybrid vehicle in 2023, KTA is on the cusp of a major vehicle replacement cycle as consumers move away from diesel-fuelled vehicles. KTA reduced its guidance for 2021 because of missing chassis. Nevertheless, strong revenue and profitability growth for the next decade make the company an excellent investment. Our financial model is conservative, leaving room for upside if the chip situation resolves sooner than expected. With KTA trading at just 0.7X 2021E enterprise value, the current share price is at an excellent entry point for this industry-leading innovator. We initiate coverage with a Buy rating and a price target of €95.